Equity refers to the value of a property minus the amount owed on the mortgage. In short, having positive equity means your home is worth more than you paid for it. In other words, it’s good news. That’s why CoreLogic’s second quarter equity report is an encouraging sign for both current homeowners and potential buyers. According to the report, 759,000 properties regained equity in the second quarter, raising the number of mortgages that are now lower than their property’s value to nearly 46 million, or 91 percent of all mortgaged properties. That is a big improvement over where things were following the housing crash, when millions of homeowners saw their homes lose value and were plunged into negative equity. CoreLogic’s CEO and president, Anand Nallathambi, says the negative equity epidemic is lifting for much of the country. “The biggest reason for this improvement has been the relentless rise in home prices over the past three years which reflects increasing money flows into housing and a lack of housing stock in many markets.” But, though the number of homes available for sale has been low in some markets, a rising number of current homeowners with positive equity could mean more homes put up for sale, giving prospective buyers more choices and reducing the rate of price gains. More here.
